Indian exporters are now permitted to open and maintain Foreign Currency Accounts (FCAs) outside India, including in IFSC Banking Units, for receipt of full export value and advance remittances. The Seventh Amendment to the 2015 Regulations, issued in October 2025, clarifies repatriation timelines and defines the permissible use of funds, thereby enhancing flexibility and efficiency in managing cross-border trade flows.
Scope and Insertion
A new sub-regulation, Regulation 5(CA), has been inserted into the principal 2015 FEMA FCA Regulations to enable resident exporters to open, hold, and maintain FCAs with a bank outside India for realisation of export proceeds and advances. The amendment explicitly treats FCAs maintained in an International Financial Services Centre (IFSC) as ‘outside India’ for the purposes of these provisions.
Who Can Open FCAs
A person resident in India, being an exporter of goods or services, may open, hold, and maintain an FCA with a bank outside India (including IFSC Banking Units) to receive the full export value and advance remittances.
Permissible Credits
Credits permitted include full export value on realisation and advance remittances received toward exports of goods or services into the exporter’s FCA.
Permissible Debits and Use of Funds
Balances in the FCA may be utilised to make payments for the exporter’s own imports into India, providing a natural hedge and operational flexibility in trade flows.
Repatriation Timelines
Funds received into such FCAs must be brought back to India within three months from the date of receipt if maintained with a bank in an IFSC. For FCAs maintained in any other jurisdiction outside India (non-IFSC), funds must be repatriated within the end of the next month from the date of receipt. Repatriation timelines apply after adjusting for forward commitments, where applicable.
IFSC Definition
The amendment introduces a definition of ‘International Financial Services Centre (IFSC)’ by reference to the International Financial Services Centres Authority Act, 2019, ensuring regulatory clarity and alignment.
Compliance with Export Regulations
The realisation and repatriation requirements under the FEMA export framework continue to apply. The Export Data Processing and Monitoring System (EDPMS) remains the primary reporting mechanism. Concurrent policy measures simplify small-value reconciliations in EDPMS/IDPMS, offering operational ease to exporters.
Effective Date and Regulatory Backdrop
The measures extending IFSC repatriation to three months were announced on October 1, 2025, with the Seventh Amendment notified later in October 2025. Earlier 2025 amendments had established the enabling provisions for exporters’ FCAs; the Seventh Amendment refines timelines, scope, and IFSC treatment.
Practical Implications for Exporters
Exporters gain flexibility to manage export receipts in foreign currency, use balances for import payments, and benefit from a longer three-month window when using IFSC accounts. The clarified treatment of IFSC accounts as ‘outside India,’ coupled with extended repatriation timelines, is expected to deepen forex liquidity at IFSC and enhance treasury efficiency.
Compliance Checklist for Exporters
- ✅ Eligibility: Resident exporters of goods or services may open FCAs outside India, including in IFSC Banking Units.
- ✅ Permitted Credits: Full export value upon realisation and advance remittances towards exports.
- ✅ Permitted Debits: Payments for the exporter’s own imports into India and other permissible trade-related expenses.
- ✅ Repatriation Timelines: Three months for FCAs in IFSCs; one month for FCAs outside India (non-IFSC).
- ✅ Reporting Requirements: All transactions must be reported through the Export Data Processing and Monitoring System (EDPMS).
- ✅ Linkage to Export Repatriation Norms:** Compliance with FEMA (Export of Goods and Services) Regulations, including timely realisation and reconciliation, remains mandatory.
Comparison: IFSC vs Non-IFSC FCA Repatriation Timelines
| Parameter | FCA in IFSC | FCA Outside India (Non-IFSC) |
| Repatriation Timeline | Within 3 months from receipt | Within 1 month from receipt |
| Regulatory Reference | Seventh Amendment, 2025 (Reg. 5(CA)) | Principal 2015 Regulation as amended |
| Purpose | Encourage IFSC use, provide flexibility | Maintain standard repatriation discipline |
| Applicable Institution | IFSC Banking Unit | Bank outside India (non-IFSC) |
Conclusion
The Seventh Amendment to the FEMA Foreign Currency Account Regulations, 2025, represents a significant policy advancement for Indian exporters. By expanding access to offshore FCAs and aligning repatriation timelines, the amendment strengthens India’s export finance ecosystem and positions IFSCs as strategic hubs for global trade management.
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